Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

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Prepare for the CPA Auditing and Attestation Exam. Leverage comprehensive materials, flashcards, and detailed explanations for each question. Master essential auditing concepts and techniques with confidence!

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Which document helps an auditor assess the consistency of the application of accounting principles over periods?

The management representation letter
The internal control report
The comparative financial statements
The opinion letter

The correct answer is: The comparative financial statements

The comparative financial statements are essential for an auditor to evaluate the consistency of the application of accounting principles across different reporting periods. These statements present the financial performance of an organization for multiple periods side by side, allowing the auditor to analyze trends, identify any changes in accounting policies, and assess how consistently those principles have been applied. This comparison helps auditors ensure that any significant variations or adjustments are properly disclosed and justified, providing a clearer picture of the company's financial health over time. The management representation letter primarily serves to document management's assertions regarding the financial statements, while the internal control report focuses on assessing the effectiveness of the company's internal controls. The opinion letter expresses the auditor's opinion on the financial statements and may reference the consistency of accounting principles, but it is the comparative financial statements that provide the concrete data necessary for such an assessment.